August 2012 B.C. Economic Fundamentals

  • Ally

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     News articles for August 2012.
    Allyssa Fischer
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  • Ally

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    Students clamour for housing in Vancouver's biggest annual rental squeeze

    Third-year UBC dietetics student Jenneke van Hemert has been looking for a room for September since the beginning of July, but Vancouver’s perennially crowded rental market has not been kind to her.


    With a full-time summer job and a fiancé in Victoria, she says she has made 25 serious attempts to line up viewings with landlords and seen two places, but landed none.


    “There is availability, but it’s been really tough,” she told Metro Thursday via phone from Victoria. “There are a couple that I’ve seriously gone after and have been declined basically before I got there because they’re already taken.”



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  • Ally

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    Vancouver home sales for July fall to lowest level since 2000

    VANCOUVER - Metro Vancouver’s real estate market remained in a slump in July, with home sales volumes down 18.4 per cent compared to the same month a year earlier.


    The Real Estate Board of Greater Vancouver said Thursday that regional sales of residential property in July were the lowest since 2000 for that month, and 31.2 per cent below the 10-year July sales average.


    Meanwhile, the composite benchmark price for all Metro properties, incorporating detached, attached and apartment homes, remained more or less flat. The benchmark has increased 0.6 per cent over the last 12 months, to $616,000.



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  • Ally

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    Vancouver housing in full correction mode: Implications for Canadian banks

     

    A research note for my faithful readers.  This was first sent to clients in mid June, so some figures are slightly dated, though the numbers out of Vancouver ain't getting prettier.  It has been shortened and edited slightly, though the message remains the same.  I hope to touch on the Toronto condo market next week.


    Vancouver crash would be major macro event with implications for Canadian banks:


    As I warned clients back in October, Vancouver (and the entire province of British Columbia) would be the first major Canadian market to begin declining.  Now, amid rapidly rising inventory and dwindling sales, price declines in the city in the past few months have been significant, with the once-hot detached segment down over 12% Y/Y.  The point of this report is to once again hammer home just how ugly the fundamentals really are in this city (and subsequently how far prices could conceivably fall) and to reiterate that a crash in Vancouver house prices has the potential to be a major macro event that will impact Canadian banks.



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    Allyssa Fischer
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  • Ally

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    Natural resource battle only beginning

    British Columbia's brawl with Alberta over the Northern Gateway pipeline and refusal to sign a national energy strategy may be harbingers of battles to come over natural resource developments that are driving the Canadian economy but drawing unprecedented criticism for their environmental impacts.


    The petroleum, forestry, mining and electricity sectors are expected to generate hundreds of billions of dollars of investment and hundreds of thousands of direct and indirect jobs across Canada over the next few decades.



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  • Ally

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    Vancouver sales slump continues, while prices stay stable

    Metro Vancouver's real estate market remained in a slump in July, with home sales volumes down 18.4 per cent compared to the same month a year earlier.


    The Real Estate Board of Greater Vancouver said Thursday that regional sales of residential property in July were the lowest since 2000 for that month, and 31.2 per cent below the 10-year July sales average.



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    Allyssa Fischer
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  • Ally

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    Race for B.C.'s natural gas assets heats up

    While politicians argue over the risks and benefits of proposed oil sands pipelines crossing British Columbia, the market has tuned into a different fight. It’s about control of the province’s natural gas assets and could involve two oil heavy weights — Exxon Mobil Corp. and Royal Dutch Shell PLC.


    Analysts say there are telltale signs the race to capture B.C.’s natural gas resources and to own liquefied natural gas (LNG) terminals on the northern coast is heating up.


    The battle for intermediate gas producer Progress Energy Resources Corp. has left an unsuccessful suitor rumoured to be Exxon, a regulatory filing by Shell for the LNG Canada terminal that suggests it will need more resource to keep full, and the Kitimat LNG plant struggling to find long-term Asian buyers.



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  • Ally

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    BC to get biggest payoff from Northern Gateway pipeline

    OTTAWA - While Alberta receives by far the largest share of the wealth generated from the sale of oilsands bitumen prompted by new pipelines to Asia and the U.S., B.C. will get most of the payoff from the actual construction and operation of projects to the West Coast, according to a study released Thursday.


    The Calgary-based Canadian Energy Research Institute concluded that the construction and operation of Enbridge’s proposed Northern Gateway pipeline to Kitimat will add  $8.9 billion to Canada’s gross domestic product over 25 years, of which $4.7 billion would go to B.C., $2.9 billion to Alberta and $608 million to Ontario.


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  • Ally

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    Metro home prices will slip, not plunge

    Metro Vancouver home prices may slip a bit over the next year, but don’t expect them to drop sharply, according to a report released Wednesday by Central 1 Credit Union.


    The report was released on the same day as a Scotiabank report with a more pessimistic outlook for prices, saying the downside risks to Canada’s housing market are increasing with a correction concentrated in Toronto and Vancouver, and that prices should fall 10 per cent over the next two or three years.


    “Right now, we’re undeniably in a sales slowdown with substantial declines in sales over the past several months,” said report author and Central 1 economist Bryan Yu. “But we’ve also seen positive employment growth and continuing very low interest rates.



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  • Ally

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    Groundbreaking on new homes drops to 'normal level' in July

    Although housing starts for 2012 so far are up 13 per cent over last year, by year's end the growth is expected to slow to just 3.5 per cent, a Canada Mortgage and Housing Corporation analyst said.


    Groundbreaking on new homes in Vancouver fell to a monthly seasonal adjusted rate of 16,800 units in July, down from 26,600 in June, according to the CMHC.


    "June was one of the largest numbers we saw since 2008," said Robyn Adamache, CMHC's senior market analyst. "Now we're just coming back to a more normal level."



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  • Ally

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    BC aerospace industry set for takeoff

     

    British Columbia’s aerospace industry, which has seen considerable growth over the past 10 years, could see even sharper growth in the coming decade.


    But stakeholders — who gathered on the eve of the annual air show in Abbotsford this week at both a major trade show and a separate showcase to promote their industry — say several factors could determine the extent of that growth, particularly the need for ramped-up research and development, a greater commitment to industry training, and increased productivity.



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  • Ally

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    Pipeline protests spur companies to consider shipping oilsands crude by rail

    OTTAWA — As battles rage over the Northern Gateway and Keystone XL pipelines, governments and energy companies are eyeing other options for transporting oilsands crude to foreign markets, including by rail, a pipeline through the Northwest Territories and shipping more oil to Eastern Canada instead.


    The political, economic and environmental stakes are enormous. Billions of dollars of investment are on the line but, as the Northern Gateway saga has shown, there are also plenty of potential pitfalls for governments and project proponents.



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  • Ally

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    Vancouver housing starts to slow in 2013

    Although housing starts for 2012 so far are up 13 per cent over last year, by year’s end the growth is expected to slow to just 3.5 per cent, a Canada Mortgage and Housing Corporation analyst said.


    Groundbreaking on new homes in Vancouver fell to a monthly seasonal adjusted rate of 16,800 units in July, down from 26,600 in June, according to the CMHC.


    “June was one of the largest numbers we saw since 2008,” said Robyn Adamache, CMHC’s senior market analyst. “Now we’re just coming back to a more normal level.”



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    Allyssa Fischer
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  • Ally

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    B.C. hit with 15,000 jobs lost in July

    British Columbia suffered significant job losses in July, notably in the wholesale and retail trade sector and in scientific and technical services.


    Following two months of little change, employment in B.C. declined by 15,000 last month, pushing the unemployment rate up 0.4 percentage points to 7 per cent, according to Statistics Canada.


    Overall, the Canadian economy's job creation came to an abrupt end, suffering the first major reversal in almost a year with the shedding of 30,400 jobs, pushing up the national unemployment rate up by one-tenth of a point to 7.3 per cent.


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  • Ally

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    Home sales decline in Vancouver, but surge in rest of B.C.

    Vancouver, BC August 14, 2012. The British Columbia Real Estate Association (BCREA) reports that the dollar volume of homes sold through the Multiple Listing Service® (MLS®) in BC declined 12.9 per cent to $3.1 billion in July compared to the same month last year. A total of 6,482 MLS® residential unit sales were recorded over the same period, down 0.8 per cent from July 2011. The average MLS® residential price was $474,954, 12.2 per cent lower than a year ago.


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